Treasury yields continue to rise even as Bessent doubles down on bond buybacks
U.S. Treasury yields have continued to rise despite government efforts to lower borrowing costs through bond buybacks. Analysts suggest that structural issues like high federal debt and government spending are overriding the Treasury's intervention efforts.
Why it matters
Rising Treasury yields impact global financial markets and are often viewed as a headwind for risk assets like bitcoin.
The buyback, which targets Treasuries maturing in 10 to 20 years, is intended to improve market liquidity and ease upward pressure on long-term borrowing costs. But the announcement had the opposite of its intended effect: Treasury yields continued to rise, with the 30-year yield climbing above 5.3% and approaching its August high.
Higher bond yields are typically seen as a headwind for assets like bitcoin. The logic is simple: every dollar invested in bitcoin is a dollar not earning the 4%-5% yield offered by longer-duration Treasury notes.
However, that’s mostly applicable when economic growth is driving yields higher. Right now that’s not the case.
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